In brief
- Steady descent amidst muted cost pass-through. Ghana’s inflation eased by 10bps to 3.2% year-on-year in March 2026, marking the 15th consecutive month of disinflation while monthly prices were broadly flat at 0.1%. Although our anticipated cost pressures from energy and supply disruptions emerged, the immediate pass-through was broadly contained, reinforcing the durable price stability and well-anchored inflation expectations.
- The inflation framework appears shock-ready given the vast scope below the minimum target. At 3.2%, inflation sits well below the Bank of Ghana’s target band, providing substantial policy headroom. The rising energy prices occasioned by the Middle East war will pose upside risks and potential feedback loops. However, we view the vast headroom to inflation targets as sufficient policy buffer and believe that the high real policy rate (10.8%) with supportive fiscal measures will strengthen resilience against future shocks. Our updated near-term forecast suggests inflation should remain in single digits through 2026 and likely end the year around the Bank of Ghana’s midpoint target. For April 2026, we forecast a modest uptick to 3.4% year-on-year and 1.0% month-on-month, reflecting the emerging cost build-up.
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